Euro Slumps Below $1.32

NEW YORK—The euro dropped below $1.32 for the first time in one month after poor euro-zone manufacturing data heightened expectations for a potential rate cut from the European Central Bank.

Investors were particularly concerned about weaker-than-expected manufacturing readings from Germany and France, the two largest economies in the euro zone. Germany's manufacturing index fell to 52.7 in February from 54.4 in the previous month,...